Which One of the Following Is Advised When Evaluating a Capital

question 43

Multiple Choice

Which one of the following is advised when evaluating a capital project in a foreign country if you are concerned about political risk?

• A) The project should be abandoned until this risk is eliminated.
• B) The project's cost of capital rate should be decreased to offset the perceived risk.
• C) The domestic discount rate should be increased to account for the added risk.
• D)The project cash flows should be decreased to account for the political risk.

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Definitions:

Alpha Rhythm

A pattern of smooth, regular electrical oscillations in the human brain, typically around 8 to 12 Hz, associated with a state of wakeful relaxation.

EEG

Abbreviation for electroencephalogram, a test that measures electrical activity of the brain through small, flat metal discs attached to the scalp.

Awake Adults

Referencing the state of alertness and consciousness in adult individuals during periods they are not sleeping.

Spinal Cord

A long, thin, tubular structure made up of nervous tissue, which extends from the brainstem down the back, enclosed in the spinal canal.